Niche finds its niche: the OTT direct-to-consumer revolution

Videoscape Europe: As content owners such as Disney bypass Netflix to deliver their own video direct to viewers, smaller players are coming along for the ride

With more than a thousand OTT (over-the-top) services delivering video content to users around the world, many audiences are beginning to find things confusing - and this is leading to the rise of more tailored content based on niche interests.

This coincides with the rise of direct-to-consumer (D2C) streaming technology, which allows for content owners to bypass major broadcast platforms to deliver their content in a branded package.

Some of the most high profile examples include forays from Disney and HBO which draw from the media companies' own collections of films, TV shows and animations. This month also saw AT&T join the party, revealing plans to launch a new D2C streaming service next year.

However, below the surface of these big-name media brands is a flourishing market for more niche D2C content.

"Niche has found its niche," said Miles Weaver, marketing director, Airbeem at Videoscape Europe this week.

Weaver said that the barriers to D2C entry have now been broken down for smaller and mid-sized content owners, and that more viewers wanted a more a la carte buying model for premium TV, and are ready to self-aggregate.

Airbeem, which delivers end-to-end platforms allowing businesses to create an OTT online video service, said one of the major growth areas was now serving "super fans".

"The available evidence suggests that all major networks are going to be launching direct-to-consumer services by 2022, with the number of subscriptions reaching 50 million. This, in turn, is bringing along the smaller, niche and genre players into the market."

For instance, WWE Network, which shows American wrestling, launched an early D2C service in 2014 and went from 300,000 in the first year to almost 1.3m subscribers by mid 2018.

"They have proved you can take something relatively niche and genre specific, and still grow a huge audience around that brand."

Weaver added that niche viewers are highly valuable because they are "evangelists" for the brand and content - marking them out as loyal and willing to pay.

"If you give the super-fans the content they crave, they will give you their time, engagement and wallet share."

Weaver added that younger audiences, free from the shackles of a full broadcaster subscription, also had the cash to pay for the content they really want and the tech was there for content owners to provide it.

"It's about creating platforms for super fans and giving them a community that links the content with social media and locks them in," he said.

Other content owners looking to get in on the D2C revolution include Formula 1, which is giving its most invested fans video they can tailor and interact with for each race, while Eurosport has done similar work for tennis fans by serving up extra content pre- and post-tournament.

Beyond sport, Anime fans have Crunchyroll, a subsidiary of Ellation, which has now amassed 35m subscribers, while D2C services exist for gamers, fantasy fans, sci-fi and beyond.

Commenting on the rise of D2C at Videoscape, Dan Fahy, VP, commercial and content distribution at Viacom International Media Networks, said it was allowing his business to develop much stronger relationships with customers.

"D2C allows us to do new things with existing partnerships...but also to do new things with businesses we've not been able to partner with before.

"D2C also lets us develop a better relationship with our super fans, and it also allows us to package our content up like we couldn't before."

To that end, Viacom has used D2C technology to deliver content for Comedy Central and Nickelodeon, with subscription apps that super-serve those willing to pay - and this is offered as part of a quad-play offering.

"These are things we could not have previously participated in, but D2C technology has allowed us to facilitate that," Fahy said.

The only real warning for businesses looking at a D2C strategy is that, unless it's going to rely on luck alone, D2C really requires a scaled business behind it.

"There's really no example of a cold-start; there has to be some promotional advantage," said Arlen Marmel, general manager of VRV, Ellation.

"There is no built-in audience - just because you launch an app, it doesn't mean anyone will care."

Marmel added that businesses looking to get in on the D2C revolution needed to plan the distribution pathway in advance and spring-board off a business or platform that already has scale.

"And you certainly can't just replicate the Netflix model on a smaller scale. These audiences need more than just video - they need engagement that extends beyond into social media, value and community."

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